7 Ways To Stop Foreclosure At The Last Minute
(Or At Least Slow It Down)
As a homeowner, you have options, and you don’t need to just lose your home to the bank, leaving you empty-handed.
We’re going to show you 7 ways to stop your home from going into foreclosure, or at least buy you some time to get things back in order.
But before we jump into how to stop foreclosure, you need to understand why it is a big deal and how it can impact your future.
Foreclosure Will Have Some Pretty Difficult Consequences
You might have been ignoring the problem up to this point, and now the bank is breathing down your neck threatening to auction off your home.
A part of you might even think that if you just let them take it, then you don’t have to deal with it anymore.
But foreclosure can do a lot more harm than simply losing your house.
Putting a stop to foreclosure will protect your credit
Going through foreclosure, on average, tanks your credit report by at least 200 points.
In addition to holding on to your FICO score, you will also avoid having a record of home mortgage default.
You will avoid additional legal costs associated with foreclosure
On average, the legal fees associated with foreclosure can rack up to $7,500, or more.
Yes, there are fees associated with the entire process beyond just losing your home!
The additional fees almost always results in bankruptcy
Which would just pile on top of your already trashed credit and borrower history.
So let’s take a look at what you can do to keep yourself out of foreclosure and avoid these things.
1. You Might Be Able To Avoid The Entire Thing By Talking To Your Lender
This might sound obvious:
If you just pick up the phone and call your lender (or answer the calls they’re undoubtedly making to you), then you might find the absolute easiest way to resolve the problem.
Think about it–
…foreclosing on a home is costly for a bank or lender.
Not only are they not going to get paid the interest on the loan they made to you, but they’re going to lose a portion of the principle when it goes to auction!
When a home goes to auction, they often sell it at a severely discounted price.
They do this because they’d rather get some money than no money.
What does this mean for you?
You actually have a little bit of leverage here. You can negotiate with them and find out what options they’re willing to give you so that you can get back on track.
2. Forgiven Payments Might Get You Back On Track
One little-known fact about lenders:
They actually forgive payments sometimes, especially if it means that they’re more likely to help you get back on track with your loan.
If you can convince the lender that you simply went through a rough spot and you actually make enough income (or can reduce enough expenses) to continue making payments, they may forgive a loan payment or two.
This could be enough to keep you out of foreclosure entirely, but it may at least buy you some time.
Either way, it’s worth asking!
3. Freezing Your Interest Rate Might Be An Option
This one only works in one scenario:
If you are on an adjustable mortgage, the lender may be able to freeze the interest rate before it changes or increases in order to keep it manageable for you.
They may additionally extend the amortization period to help compensate for the different in payments and rate change.
This is called a loan modification (although it’s one of a few different things that they can do).
4. Add The Payments To Your Loan’s Balance
Take advantage of your equity:
If you’ve had the loan for a while, then you likely have some equity built up.
The lender may be willing to add your backpayments to the loan.
This is essentially a refinance, so your loan balance and amortization schedule will be different.
This could really help if you’re able to make regular payments but those already-owed payments are keeping you in the hole.
5. Selling The Home Can Be A Saving Grace
Hear me out:
Although you may not want to sell the home, or you simply think that you can’t, there’s always an option.
If your home is in fairly good condition, you may be able to call a real estate agent and get it listed on the MLS to find a buyer.
But be careful!
Listing on the MLS can take a lot longer than you expect, and if you’re under a contract with an agent, then you’re locked out of finding other types of buyers.
If you’re on a very tight timeline or you don’t think the house would sell in the market, don’t worry!
There’s an alternative:
Sell the home to a home buyer company (like us).
The benefits here are:
- NO repairs needed
- NO commission fees
- NO closing costs
- Close on the home quickly (can be 7 days or less)
- Get paid in cash
This can be the best option that saves you from the foreclosure process as well as bankruptcy.
These are just some of the huge benefits of using a real estate agent.
It also leaves you with some cash that can help you on your next steps to getting back into stability.
6. Short Selling The Home Can Be The Next Best Option
You may already be at a point where the lender has filed a Notice of Default.
If that’s the case, you still have the opportunity to sell your home fast before it goes to auction.
When the home goes to auction, the lender is simply going to sell it anyway, so presenting an active buyer is more likely to get approved because it saves them time and money anyway.
So, continue to aggressively seek a buyer.
If you don’t have one lined up or you haven’t gotten any serious bites from the MLS, seriously consider contacting us to buy it from you.
We can get you an offer that will close within days, saving you from the full foreclosure auction and putting some cash in your pocket.
7. Filing For Bankruptcy Can Buy You Some Time
If keeping the home is your #1 goal:
Filing for bankruptcy can actually put a pause on the foreclosure process.
This doesn’t mean that you’re going to completely get out of it, but it may buy you some time, up to 2-4 months.
Get with a lawyer that specializes in bankruptcy, explain everything about your situation and all your finances, and they will recommend the best course of action to take.
This may not be an option if you’ve filed within the last 7 years, so make sure you find out what routes you can take from someone who can give you legal advice.
If foreclosure is looming over you, there are things you can do!
There is a lot of foreclosure information available to you, from the web and your lender.
Don’t wait until the last minute.
Don’t wait until they take the home away from you.
Pick up the phone and either call your lender or call us.
You’re going to get through it one way or another.
Let’s make it the easy way.